Monday, April 30, 2012

While natural gas production rose 8% nationally in 2011 and reached record total levels, Pennsylvania's natural gas production more than doubled in 2011. Pennsylvania's production reached 1.3 trillion cubic feet, according to EIA. www.eia.gov/todayinenergy/detail.cfm?id=6030.

How important is Pennsylvania to the national gas boom and to the setting of an all-time national production record last year? Indispensable.

The increase in Pennsylvania's production accounted for approximately one-third of the total national production increase during 2011.

Legere reports that two, new water wells are the focus of the investigation that began after landowners complained to DEP about water quality issues. Repairs by applying additional cement at one gas well were conducted in late March to one gas well operated by Cabot.

While there is no evidence of frack fluids returning from depth to contaminate the Dimock water or just about any other water, gas migration is a real issue that requires constant attention by regulators and companies.

Friday, April 27, 2012

AEP's Nick Akins is decreasing significantly the amount of coal-fired generation and boosting gas and renewable energy production, but he seems less than sure that the current rise of gas-fired power is a good thing for the nation. thehill.com/blogs/e2-wire/e2-wire/224035-aep-president-warns-of-natural-gas-price-volatility Speaking yesterday to the US Chamber of Commerce, Akins frets America could become too dependent on natural gas power plants and then find gas to be expensive.

Is Akins right to worry? And should his focus be on just the price of gas?

EIA reports that coal prices have increased at a compound rate of 6% for ten years. US coal exports have surged in 2010 and 2011, as coal becomes increasingly priced in a global market that is straining to supply voracious coal demand from China and India. Consequently, focusing on just natural gas when discussing price volatility of fossil fuels is a mistake, but the topic of fossil fule price volatility is timely, since an historic shift in power production is underway.

Those in the generation business have been burnt in the past by rising natural gas prices that made substantial investment in natural gas power plants uneconomic for long periods, during the last 10 years, so Akins is voicing a common concern about natural gas. Power plant investors understandably fear a repeat.

But unless Rolling Stone Magazine and the New York Times is right that shale gas is a Ponzi scheme (they are not), the US natural gas supply position has been revolutionized by shale gas. Akins, however, worries that environmental risks could undercut shale gas production.

Environmental risks associated with natural gas production exist but are less than those associated with coal and oil and arguably less than those posed by biofuels and nuclear power. The risks can be further minimized by a combination of strong regulation and excellent operations.

Natural gas power production is a good thing, but it is possible to use too much of a good thing. Could so much gas be exported and so much gas be used for generation, transportation, and industrial processes that demand exceeds even the shale boosted supply and price explodes? America is certainly not close to such a scenario, as natural gas prices have collapsed, and a still reasonable $6 for a thousand cubic feet is now at the top of many price forecasts. Moreover, policies like Renewable Energy Portfolio standards for electric generation and transportation fuels already exist that protect against such an outcome.

Diversity of generation sources remains important for energy security, and policies that support energy diversity are good investments for our future. The good news, however, is that the nation's energy supply is currently becoming more diverse and not less. Gas is rising to 29% of power production this year; coal is falling to 38%, but still provides more electricity than any other energy source. And that is not the entire story.

Renewable energy is booming and typically has zero fuel costs, making renewable energy a good hedge against the possibility or reality of rising fossil fuel prices. Indeed 29 states have Renewable Energy Portfolio Standards that serve to insure increasing diversity of electric generation sources. California will get 33% of its electric power from renewable energy sources as soon as 2020. By the end of this year, seven states will get more than 10% of their electricity just from wind power.

The nation and California also have renewable energy or low-carbon transportation fuel requirements too. As a result, ethanol and biodiesel production has boomed over the last 5 years.

And let's not forget that America also gets about 20% of its electric power from nuclear energy, and the nuclear industry has done a great job of getting more power from existing nuclear plants.

Finally, there is negawatts--energy efficiency and demand response. As one example, the PJM power pool, America's largest wholesale electricity market, has more than 15,000 megawatts of demand response and energy efficiency providing capacity from Chicago to New Jersey. America is getting more energy efficient every single day and this is a vital form of energy diversification.

America is on track to have a more diverse, cleaner, and affordable energy supply. The natural gas boom is one, big reason why so much is going right on energy for Uncle Sam.

For decades, with operations from West Virginia, Ohio, to Arkansas, AEP has been one of America's largest electric utilities that depended overwhelmingly on coal-fired generation to meet the needs of its millions of customers. But times are changing at AEP, with the company announcing at its annual meeting this week that it will use more gas and renewable energy and less coal.

Akins wrote in a statement: "Several factors are driving us in this direction, including new environmental regulations; the economics of coal versus natural gas; the operating cost, age and efficiency of some coal units; increased competition; and grid reliability."

In 2020, when AEP is getting 50% of its generation from coal, what portion of America's electricity will be coming from coal? In 2012, EIA states 38% of our power will come from coal so AEP may be America's largest generator of coal-fired generation in 2020, even after its on-going shift to gas and renewable energy for more of its total power.

The USA's historic transition from old to new power plants and from polluting to cleaner power generation takes many forms more than modernizing coal plants, switching to natural gas, or building wind and solar farms.

The York, Pennsylvania based Voith Hydro is installing for generation owners an impressive 422 megawatts of new hydro power production just in Pennsylvania and Ohio. That will be a lot of power, approaching the equivalent of a small nuclear unit, in a relatively small area.

Fully installed, each megawatt of the new hydro generation will cost about $5 million, which is more than wind or solar today. AMP, however, expects the hydro projects to operate at between 55% to 60% capacity factors, levels that are much higher than wind or solar farms. Also, hydro production is more predictable than wind or solar typically can be.

The principal cost advantage for these hydro projects remains zero fuel costs and low daily operating costs for their very long useful lifes. The absence of a fuel cost means that AMP will have long-term, stable power costs from these facilities.

The four new AMP hydro projects are being installed at existing U.S. Army Corps of Engineers locks and dams. Those dams and locks do impact the river. Hydro is not perfect. Yet, the power produced by these hydro projects will have zero air pollution, will not withdraw water from the rivers, will not heat water, or have dirty water that must be safely discharged. Those are big environmental advantages compared to other forms of power production.

Hydro power used to provide 40% of America's power. Those days are gone. But new hydro is part of America's on-going electric generation makeover.

Thursday, April 26, 2012

For years gas drilling companies and regulators have said that decades of hydraulic fracturing had not caused frack fluids to return from depth and reach aquifers. Now a British university study documents why fracking itself (as distinguished from spills at the surface or cementing failures during the drilling phase) has an excellent safety record.

The University of Durham's Energy Institute in the United Kingdom investigated hydraulic fracturing in America, Europe, and Africa by looking at thousands of induced fractures produced by "fracking" and found why hydraulic fracturing has not caused pollution of aquifers. The longest distance for any fracture was 588 meters. meters. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/oil/8221049. Just 1% of the investigated fractures went as much as 350 meters. The lead researcher is Professor Richard J. Davies and the study is published in Marine and Petroleum Geology.

Simply put, fracking for shale gas is happening at such depths that there is next to no danger of polluting groundwater with fluids returning from depth. Fracking for shale gas happens in the USA typically 3,000 to 10,000 feet below any groundwater source, and the induced fractures don't travel anywhere near that distance.

Also it should be noted that this study further confirms that hydraulic fracturing is not a new technology and has been used around the world. As a result the British researchers were able to look at fracking and fractures on three continents. If fracking were causing groundwater contamination, such pollution would have shown up years ago all around the world.

It really is time to focus on the real threats to groundwater--spills and leaks at the surface and cementing errors that allow methane to migrate.

Attacking the existence of green jobs is as necessary for good standing in the conservative movement as denying climate change. These assaults, however, run into the reality of projects like the on-going upgrade of the Holtwood hydro facility on the Susquehanna river that create hundreds of manufacturing and construction jobs, as well as zero pollution power for consumers.

Manufactured by Voith Hydro in its York, Pennsylvania factory, two large turbines are being added to PPL's Holtwood hydro facility on the Susquehanna river that will boost its power generation capacity from 108 to 230 megawatts. http://www.energycentral.com/functional/news/news_detail.cfm?did=24314195. The new turbines will produce enough additional power to supply another 100,000 homes.

I have toured the Voith Hydro factory in York. It is a world-class operation that manufactures large power generation equipment and sends its products around America and the world.

Green jobs and green power are real and bigger than ever at Voith Hydro and the Holtwood hydro facility located in Pennsylvania.

Wednesday, April 25, 2012

Reaching grid parity is the Holy Grail--solar priced at the same or less than electricity from the gird-- for the solar industry. Yet, the grid price varies enormously around the USA, depending on the utility service territory, where one is located, so there is no one grid price with which to reach parity.

Indeed, utility electricity or grid prices can vary by 100%, and differences are even 50% or more among utilities within the same state. For example, in North Carolina, most residential electricity consumers pay about 10 cents per kilowatt-hour, but some pay as much as 16 cents per kilowatt-hour.

At the rate that solar pricing to continues to fall, solar should be at grid parity in more than half of the country by 2015 or with the national average price of grid power. That will will send shockwaves through the US energy industry, unleashing major creative destruction.

Tuesday, April 24, 2012

While the argument rages about whether natural gas will be a "bridge" to a low-carbon future, natural gas will cut US carbon emissions by at least 300 million tons in 2012 alone. How much is 300 million tons? It is about equal to the entire annual carbon emissions of Pennsylvania or an amount little less than 1% of annual global emissions. It's a lot.

Here is how natural gas produces at least a 300 million ton reduction in US 2012 carbon emissions.

Each percentage point in the decline of coal's electricity generation market share cuts carbon emissions by about 45 million tons. Coal's 14 percentage point market share decline from 52% in 2000 to 38% in 2012 (the EIA 2012 forecast) means that emissions in 2012 from coal will be about 630 million tons lower this year than if coal still provided 52% of our electricity.

Indeed, coal's market share will decline 4 percentage points this year, dropping from 42% in 2011 to 38% in 2012, according to EIA data. Just that 4 percentage points 2012 market share decline for coal will drop carbon emissions by 180 million tons.

Since carbon emissions from gas generation are about half or 50% of the carbon emissions from coal generation, the 14 percentage point decline and 13 percentage point rise in natural gas yields about 300 million tons or more of net carbon reductions.

No single change in the energy marketplace in the last decade has yielded more carbon reductions than the displacement of coal generation by natural gas. For example, though wind's rise to a 3% share of our electric generation is important, wind avoids approximately 135 million tons in carbon emissions in 2012.

The fact that the rise of natural gas has avoided more carbon than any other single change in the marketplace is proving inconvenient to those who bash gas. The rise of gas is also slashing sulfur dioxide, mercury, soot and other emissions that cause hundreds of thousands of illnesses each year. Ignoring these facts betrays our health, environment, and economy.

Monday, April 23, 2012

Stories about a solar company in financial distress are about as common as ones about the latest airline bankruptcy. In the solar world, it is both the best and worst of times, and that strange reality is explained by two numbers.

The global solar boom features booming manufacturing capacity of solar modules and booming solar demand. But the boom in solar manufacturing capacity so far is bigger than the boom in solar demand, with the result that 40,000 megawatts of solar manufacturing capacity are currently chasing about 28,000 megawatts of annual, global solar installations.

Those two numbers--40,000 chasing 28,000--are the fundamentals behind the highly competitive solar industry. Only the fittest solar manufacturers will survive by delivering even lower solar prices to customers who are smiling at low solar prices.

And low solar prices are now the main ingredient behind the global boom in solar installations.

On still another friday, EPA released on April 20th water test results for 16 more homes in Dimock. This round was similar to the prior rounds, with EPA announcing that the results did not require it to take "immediate" or "further action."

The EPA stated that it currently had no conclusions to offer whether the methane or arsenic levels were a result of natural causes or drilling. And that is not good enough.

Once the EPA began testing in Dimock, it must do the job fully. It should be doing isotopic analysis of the methane for example, to determine the source of the gas in water, as the Pennsylvania Department of Environmental Protection did in 2009-2010.

Importantly, the latest EPA test results showed no spikes in chloride or any other indication that frack fluids contaminated drinking water.

A flood of head-to-head, Obama-Romney polling flowed forth, since Governor Romney forced Senator Santorum to throw in the towel prior to tomorrow's Pennsylvania primary. The polling flood shows the Obama-Romney horse race is now close, with the President having a slight edge. But those polls have one big problem. They did not include another horse that will be in the race.

Among all the polls, only one--a Public Policy Polling survey last week--included Governor Johnson, the former two-term Governor of New Mexico, who is the probable Libertarian candidate for President.

The PPP poll found Obama with 47%, Romney 42%, and Governor Johnson 6%. The 5-point Obama edge compared to a 3 point lead at 49% to 46%, when Obama was paired just with Romney.

Johnson was drawing two times as many votes from Romney than Obama, though interestingly Johnson's best voting group were voters who described themselves as very liberal. Governor Johnson favors full drug legalization and gay marriage, positions that resonate with very liberal voters.

Governor Johnson would be the most qualified candidate the Libertarian Party has ever run for President. As a two-term Governor, he has more executive government experience than Romney and more than Obama when he ran in 2008. He is also smart and witty, running with nothing to lose, at a time when many voters are upset.

If Johnson draws 6% of the vote, he will get more than 8 million votes. If his share shrinks, as is likely, and he gets 3%, he will still pull about 4 million votes. Many of those could be concentrated in 5 battleground states in the Southwest--New Mexico, Nevada, Colorado, Arizona, Nevada--plus New Hampshire.

Still another third party decided on its Presidential candidate over the weekend. Former Congressman Virgil Goode will be the Constitution party candidate and may be a small factor in his home state of Virginia. The Green Party too will have a candidate in 2012, and the Nader candidacy elected George Bush in 2000.

While the 2012 Presidential ballot will have many names on it in some states, at this point, the PPP survey establishes that any poll that does not include Governor Johnson is deeply flawed. Johnson currently moves the national results by about 2 percentage points, an amount that the Obama and Romney campaigns will spend hundreds of millions of dollars to achieve.

The history of Presidential politics is full of campaigns where third party campaigns decide or shape the elections. See Wallace in 1968, Perot in 1992, Nader in 2000, or even Anderson in 1980 and Perot again in 1996.

Governor Johnson is on course to add his name to that history. That development is a dark lining in what otherwise were 2 good weeks of polling for Romney.

Thursday, April 19, 2012

Compelled by federal court litigation filed in 2009, the EPA final gas drilling air rule slashes pollution coming from gas production at modest costs. The pollution reduction numbers are big: volatile organic compounds cut by up to 290,000 tons, benzene by 12,000 to 20,000 tons, and methane by 1 million to 1.7 million tons.

The reductions of some pollutants, including those that cause ground level ozone or smog, will be an impressive 95%.

Though details of the rule had leaked (ironic when the rule addresses leaks of pollutants), the EPA made the rule available to the public yesterday. http://www.epa.gov/airquality/oilandgas/actions.html. The EPA materials at the link are well done and are worth reviewing.

Through the public comment process, EPA learned that approximately 50% of gas wells that are completed each year now use green completions or reduced emission completions. The 50% number was higher than the EPA had presumed, when the proposed rule was announced.

Importantly, one implication of the high number of current green completions, now understood by the EPA, is that the EPA's 2.4% estimate of methane leakage in gas production is likely too high and will be revised downward.

The EPA also learned that approximately 11,400 wells are hydraulically fractured and completed each year, and another 1,400 are refracked. Again these numbers are lower than EPA had estimated when the proposed rule was published.

Companies will be required to do green completions/reduced emission completions on most wells (but does not require them for low pressure wells as well as exploratory and delineation wells) by January 1, 2015 and must flare prior to that time. Flaring destroys up to 95% of most pollutants but not nitrogen oxides that cause ground level ozone.

The rule also addresses other equipment used in gas production such as compressors, dehydrators and storage tanks and will slash emissions from those too.

The rule contains different starting dates for its various provisions. The biggest change from the proposed rule to the final rule was extending until January 1, 2015 the implementation date for reduced emission completions.

EPA states that an extension was required by an inadequate number of reduced emission completion sets currently available. The American Petroleum Institute filed comments that 300 such sets exist. EPA concluded that more will be needed so that the approximately 13,000 green completions per year required by the rule can be done and so provided more time, but required flaring in the interim.

The EPA final rule is smart, reasonable, and deserves tow thumbs up. Let's hope that this is one rule that nobody appeals or, more realistically, that survives intact the gauntlet of federal court review.

Even prior to the final EPA gas drilling air rule, gas emitted virtually no soot, mercury, or lead, while coal and oil emit a lot of some or all of many of those pollutants. That makes gas cleaner than coal oil in many ways that affect human health.

But the leakage rate of methane from gas production does matter for climate impacts and has been put at very different levels by different studies. The EPA in 2013 has lowered its estimate of the leakage rate, but everybody agrees the gas leakage rate can and must be reduced. And so the EPA final rule that takes affect in 2014 is good news, because it slashes by 95% emissions of volatile organic compounds during gas production. It also cuts methane emissions. http://www.epa.gov/airquality/oilandgas/actions.html.

The rule also means that shale gas may emit less methane than other sources of natural gas. Here is why.

The rule requires green completions/reduced emission completions must be used at high pressure wells like shale gas wells. Virtually all shale gas wells will be green completed by January 1, 2015. Yet, the rule does not require green completions at low-pressure wells (87% of coal bed methane gas wells are low-pressure).

Shale gas development also typically has newer gathering systems and newer equipment generally, because it is the most recent. Newer pipelines and equipment reduce methane leakage, compared to older systems that serve typically conventional gas fields.

The $11.8 billion that Delta spent during 2011 on fuel is painful to Delta, its shareholders and consumers, and so Delta is reported to be interested in buying the ConocoPhillips refinery in the Philadelphia suburbs in an effort to control its fuel costs. The purchase would be good for the employees formerly employed at the refinery and possibly for regional fuel prices.

High fuel cost is the necessity motivating Delta to innovate the airline business model. I wish it good luck in doing so.

Could hydraulic fracturing provide a means of cleaning some Pennsylvania streams? Perhaps so.

A new study from the Rand Corporation gives hope that gas development could partially reduce "acid mine pollution," by using for hydraulic fracturing the highly acidic water that drains from old coal mines and piles of coal waste. www.statejournal.com/story/17515367/coal-mine-waterconsidered-for-frac-water. Acid mine pollution or what Rand calls Coal Mine Water is generally judged the leading cause of damage to Pennsylvania's waters, because it essentially destroys all aquatic life, and devastates about 4,000 miles of streams in the Commonwealth.

Not long after the shale gas boom began, the possibility emerged of using acid mine drainage now fouling streams as a source of water for hydraulic fracturing. Doing so would be a double win for the environment by reducing the damage done by acid mine drainage and decreasing water withdrawals from streams for hydrualic fracturing. Making the possibility of using acid mine drainage in this manner more tantalizing is the fact that often acid mine pollution is most severe in areas where gas development is also taking place.

The Rand Study states: "All told, the amount of CMW [coal mine water] in the region is likely to exceed the quantity of water required by the Marcellus Shale extraction industry in the next decade by a large margin." Rand further finds that the economics of using this resource will vary, depending on site specific characteristics, including transport distances, and chemistry of the CMW.

Typically to stop acid mine drainage from devastating streams requires constant, forever treatment of the polluted waters. It is very expensive to do. A substantial environmental victory would be won, even if a handful of sources, where untreated coal mine water is now devastating streams, could be stopped by using the polluting water for hydraulic fracturing.

"It isn't on the roof, it IS the roof," says Dow of its Powerhouse Solar Shingle. www.dowsolar.com. The Dow solar shingle has dual functionality, serving as both a roof material and a power source. Without hyperbole, Dow says it is "reinventing the roof."

Yesterday, Dow announced that its solar shingle was now available in Texas and California, in addition to Colorado. Dow is distributing the product through selected roofing contractors. The solar part of the shingle is made with thin film, and the system is capable of powering a home.

This breakthrough product looks great and is a finalist for the Edison Awards Best New Product in the Building Materials Category. edisonawards.com/2012Finalists.php. Dow is manufacturing this highly innovative, practical product in Michigan. It is a game changer for both the home energy and solar markets.

Tuesday, April 17, 2012

In many parts of Pennsylvania, such as a beautiful drive on Route 322 from Hershey, Pennsylvania to the Pennsylvania Turnpike, and then on the Pennsylvania Turnpike itself, you can see the emerging solar industry. Solar systems have sprouted at farm buildings, manufacturers, schools, and homes across the Commonwealth.

In just 3 years, the number of solar systems operating in Pennsylvania has increased 20 times, going from 300 to 6,000. www.energycentral.com/functional/news/news_detail.cfm?did=24150430. Total solar generation capacity in the Commonwealth is 150 megawatts or enough power to fully supply approximately 25,000 homes. Of America's 4,000 megawatts of solar generation, Pennsylvania has about 3.75%.

Pennsylvania is, indeed, more than just shale gas. While gas booms, solar prices are about $3 per watt for an installed solar system, even without the 30% federal solar tax credit, and $2 per watt with it. At those prices, asking a solar company to give you a bid for a solar installation is a smart thing to do.

When you get your solar bid, you may find that solar systems payback investment in 5 to 8 years. That easily beats putting money in a bank to earn low, low interest.

Across the entire PJM grid, that extends from Illinois to New Jersey, the amount of solar power capacity is approaching 1,000 megawatts or about 25% of the nation's solar capacity. That much solar helps to maintain reliability and trims peak power prices paid for by all electricity consumers, while reducing the hours of operation for some of the most expensive, dirtiest fossil fueled peaking plants.

And so the neighborhood solar system is helping to keep your lights on, your electricity bill affordable, and the air clean.

Monday, April 16, 2012

How would you like to save 8% on your electric generation, lock in the lower price for 2 years, and have 50% of the power be generated by wind power operating in the regional grid. My mother just did that by shopping for her electricity generation.

My mother lives in Maryland, in the Baltimore Gas & Electric service territory, and her BGE rate was going to be 9.4 cents for generation this summer. That power was being provided by coal, natural gas, nuclear, and about 5% renewables.

We went online and found lots of options that were below the 9.4 cents price, but my mother focused on the wind power options and the longer-term contracts.

She ended up picking a 2-year, 50% wind power product for 8.7 cents per kilowatt-hour or 8% less than the 9.4 cents BGE price. Mom's wind energy will come from wind farms operating in the regional grid that includes Maryland (as well as Pennsylvania).

She could have saved even more--a full 1 cent per kilowatt-hour--if she had selected a one-year, 50% wind power product. But with low prices available now, buying longer power contracts makes a lot of sense. Even bigger immediate savings were possible, as much as 1.5 cents per kilowatt-hour, if she had gone for the lowest cost option and not bought any wind or renewable energy.

I am proud of my mother and her latest smart move for her pocketbook and the planet.

Friday, April 13, 2012

America's wind industry had over 46,000 megawatts of power installed by the end of 2011 and had more than 8,000 megawatts under construction. All that wind adds up to a major source of power for America and especially for 5 states that now get more than 10% of their electricity from wind.

South Dakota, Iowa, North Dakota, and Wyoming in 2011 all generated more than 10% of their electricity from wind in 2010. http://www.awea.org/newsroom/pressreleases/Annual_Report.cfm. Additionally given wind farms under construction there, Kansas and Oregon probably will join the 10% wind power club in 2012 and push membership to 7 states.

In 2011, South Dakota lead the nation in the highest percentage of electricity coming from wind at 22%, with Iowa hitting more than 18%, and ranking a close second.

According to the American Wind Energy Association, Pennsylvania has 3,000 to 4,000 wind jobs, ranking the state 8th in total wind jobs, and nearly all of those Pennsylvania jobs are threatened by the failure of Congress to extend the Production Tax Credit. http://www.awea.org/newsroom/pressreleases/Annual_Report.cfm.

Pennsylvania also has a wind construction boom underway in 2012 that could become a bust in 2013. Right now, with 520 megawatts more of wind power being built, Pennsylvania ranks 6th in the amount of wind power under construction in 2012.

Every month that goes by without Congress enacting an extension of the Production Tax Credit means at least the temporary loss of jobs during 2013 in Pennsylvania and across America.

While the economy grows, Uncle Sam's carbon diet continues in 2012, according to the EIA.

EIA projects that US carbon emissions from energy related sources (about 85% of total) will fall another 1.9% in 2012, after falling also 1.9% in 2011. www.eia.gov/forecasts/steo/. Each of those annual declines amount to more than 100 million tons.

If the EIA 2012 forecast is close to the mark, US carbon emissions will be back to 1996 levels or lower.

What's driving lower emissions? Gas displacing coal in power generation, with natural gas providing 29% of electricity and coal's market share falling to 38% in 2012, is a major source of the decline, according to EIA. Fuel efficiency driving down carbon emissions from transportation is also playing a significant role.

What is not causing lower carbon emissions in 2011 and 2012 is a declining GDP. The economy has added jobs for 24 straight months and about 3 million since February 2010.

Thursday, April 12, 2012

Researchers from the Environmental Defense Fund, Princeton University, Rochester Institute of Technology, and Duke University have published an important paper that underlines again how important cutting methane leakage rates is for the global future of natural gas over the next 20 years.
http://www.pnas.org/content/early/2012/04/02/1202407109.full.pdf+html.

The paper finds that replacing coal with natural gas does produce climate benefits during all time frames, but finds that the climate benefit is uncertain of switching from gasoline or diesel to natural gas.. Specifically the researchers find that methane leakage rates would have to be 1.6% for CNG cars to produce immediate as well as long-term climate benefits.

For CNG cars to have immediate climate benefits and not just long-term benefits, the paper states leakage rates would have to be cut 45% from assumed current levels to reach 1.6%. Some other experts think the leakage rates are near1.6% now, and this disagreement about current leakage rates drives home the need for more data.

The authors of this paper themselves raise their voices in support of more data on current leakage rates and note the good news that more data is now being collected that should start to clarify current leakage rates. Wisdom, however, counsels renewed efforts to cut methane leakage rates, no matter the current number.

The paper also innovates by producing a tool that it calls "Technology Warming Potential" TWP, a refinement of the IPCC's Global Warming Potential (GWP).

Cutting leakage rates can sharply reduce the carbon footprint of natural gas. Some in the gas industry don't accept climate science, and those may be tempted to just ignore this literature. That would be a big mistake for the future of natural gas in the next 20 years.

Others in the gas industry do indeed accept climate science and understand how central the methane leakage issue is becoming to public and governmental acceptance of natural gas around the world. This "EDF" paper is a contribution to sensible thinking and action on the topic, though the authors themselves raise their voices in support of more data on current leakage rates.

If there is an electric generation company that has switched in the last 3 years more power generation from coal to natural gas than the Southern Company, I would be shocked.

As reported in yesterday's WSJ, at page 3 by Russell Gold and 2 colleagues:

"In 2008, when gas prices still were high, Southern got almost 70% of its electricity from coal. Today, it is getting less than half as much power from its coal fleet. Gas-fired plants now are responsible for 46% of its electricity, up from about 16% four years ago."

Nationally gas in 2012 will provide 29% of all electricity, according to the latest EIA data, so Southern Company has moved from getting less electricity from gas than the national average three years ago to now getting much more than the national average.

EIA further projects that coal will provide 38% of America's electricity in 2012 and apparently Southern may get less than 38% of its electricity from coal, when it got 70% from coal, just three years ago.

These numbers are made more stunning by the fact that Southern Company is America's largest electric utility by some measures.

Make no mistake that this massive switching from coal to gas cut substantially the mercury, soot, sulfur dioxide, nitrogen dioxide, and carbon dioxide emissions from Southern's plants.

Make no mistake that the shale gas revolution made those pollution reductions possible by making natural gas cheaper than coal.

Has anything done more to clean America's air in the last 3 years than natural gas? Booming wind power and energy efficiency also have avoided substantial pollution but probably not as much as natural gas, given the massive coal to gas switching.

By displacing substantial coal generation often from the oldest coal plants with no pollution controls, natural gas has been a big bridge to less pollution and illness over the last decade and especially since the shale gas boom in 2008. Before supporting bans on shale gas, environmentalists should face these facts.

Concerned Scientist has provided his review of the forum in the Comments section of the April 9th posting. It is worth reading.

I would like to see more comparative analysis in the discussion, as an informed judgment about the promise or perils of fracking is impossible without it.

How does gas compare to coal, oil, nuclear, biofuels, large hydro, biomass, wind, solar on water impacts? What are the biggest impacts on water quality? Where does gas drilling and its impact on water rank among the top 5 or top 10 polluters of water?

But the monday session was a step toward a fairer, fuller discussion of the issue and toward finding the lost middle ground.

There is no bigger issue for natural gas's prospects 20 years into the future and the global acceptance of natural gas than its carbon footprint. Though it is easy to neglect such long-term thinking, given the pressures of the present, the gas industry forgets this point at its long-term peril.

To decrease natural gas's carbon footprint, the gas industry should support research funding for carbon capture and storage to have commercially viable solutions within a decade. Here it has common cause with some voices within the coal industry that genuinely accept global warming and some environmentalists who want viable carbon capture technology developed.

Beyond supporting the development of carbon capture technology, the gas industry must slash right now methane leakage, come as close as possible to eliminating venting, and decrease significantly flaring.

A big increase in permits to flare gas in Texas and substantial flaring of natural gas in North Dakota spotlights the practice of flaring. Here are the numbers.

In 2011, as much as 35% of gas in North Dakota was flared, according to the Energy Information Administration. http://www.eia.gov/todayinenergy/detail.cfm?id=4030. EIA further states, "The percentage of flared gas in North Dakota is considerably higher than the national average; in 2009, less than 1% of natural gas produced in the United States was vented or flared."

In Texas, permits issued to flare gas increased from 158 in 2009 to 651 in 2011. The jump in flaring coincides with especially a boom in oil production. Gas generally is flared when it is associated with oil production and when gathering pipelines are not available to take the gas to market.

Compared to venting methane or gas, flaring gas reduces in the near term the global warming potential by destroying methane and releasing instead carbon dioxide--a less potent global warming pollutant in the short run. It also should be noted that Professor Howarth in his study assumed that 100% of methane at shale gas wells is vented during the flowback period, a demonstrably false assumption.

While flaring is a better environmental practice than venting methane (as methane over an initial 12 years traps about 22 times more heat than carbon dioxide), the best practice is to capture methane and put it in a pipeline. As a result, a group of investors representing $500 billion in assets wrote in March a letter to oil and gas producers expressing concern about the volume of gas being flared. http://www.ceres.org/files/oil-gas/investor-flaring-letter.

The investors also note that the flaring of gas in North Dakota amounts to a $100 million loss of product that would otherwise be revenue supporting their investments. That is real money being lost right now. Yet the damage being done to the natural gas "brand" by flaring and methane leakage rates higher than need be is greater still.

Why did Governor Kasich feel a need to say it "isn't popular to always say" those words? Probably because he was speaking to a room full of Republican donors, according to the Columbus Dispatch.

I praise Kasich for not pandering to what he thought his audience wanted to hear and embracing the bottom line of the enormous amount of climate science that is now available. Rick Santorum, Rush Limbaugh, Koch Brothers, and the ideological police of the conservative movement will certainly be in a sour mood about the Governor's comment, and this statement could even strike Kasich from the list of acceptable Republican Vice Presidential nominees

To encourage Governor Kasich, polling indicates that between 40% to 55% of Republicans accept that temperatures are rising and climate is changing. Moreover acceptance of these basic points is much greater among independent and Democratic voters.

Even more importantly, Governor Kasich stands on the strong foundation of a vast scientific record that grows bigger.

Tuesday, April 10, 2012

Look no further than my sister's excellent experience with her Volt to see why Volt sales skyrocketed in March to over 2,100 cars.

During a wonderful Easter weekend, my sister said that she had driven her Volt 4,000 miles on 16 gallons. She is averaging about 250 miles per gallon, using the car principally for a 40-mile total commute and local trips.

A 25 miles per gallon car would have required 160 gallons to go 4,000 miles. Fuel costs would have been $608, assuming $3.80 per gallon. My sister's gasoline costs amount to $60.80 or a gasoline savings of about $550.

Her electricity costs are probably less than $90, making her bottom line savings approximately $450 since November 2011.

Clare normally charges at home and her place of work. She, however, did charge once at the Baltimore Airport. Public charging stations are being built but still are unusual.

The lead researcher in the paper, Mr. Ellsworth, told MSNBC that he believes the increased number of earthquakes is not associated with hydraulic fracturing, but instead with the disposal of drilling waste fluids in deep well injection sites, of which there are 144,000 in the USA.www.msnbc.msn.com/id/46980665#.T4IkGpmZ3To. Going back 50 years, the scientific record includes a number of small earthquakes that have been linked to the disposal of liquids from various sources, including the Defense Department, under pressure in deep underground caverns.

No matter the source of the fluids, this issue requires responsible discussion and action to minimize the occurrence. Regulators in Ohio strengthened siting and operational rules for injecting underground drilling wastewater, for example, following the Youngstown earthquake.

Additionally, with an operating plant in Williamsport, Pennsylvania, Eureka can fully treat drilling wastewater so that it becomes fresh water and does not need to be injected deep underground. Eureka is seeking to expand its operations in Pennsylvania and Ohio.

The combination of treatment alternatives that reduces the volume of liquids that are injected and the stronger siting and operational rules adopted by Ohio are approaches that will likely spread to limit risks associated with injecting liquids underground.

Monday, April 9, 2012

Last week this blog had a good discussion about Abraham Lustgarten's lament that the middle ground on fracking had been lost, and that it should be found once more. Pro Publica tonight is sponsoring a forum, entitled the Perils and Promise of Fracking in New York City, at which Mr. Lustgarten will be one of 4 panelists. Will the lost middle ground be found?

It will be interesting to see whether the truth about Dimock and EPA testing is accepted. Will the panelists accept that gas migrated but that hydraulic fracturing did not cause contamination? Will the panelists focus on real impacts from gas drilling and how to reduce them? Will the industry accept its responsibility to build a ubiquitous culture of safety and be accountable for mistakes? Will regulation that is professional and independent be genuinely embraced by all?

Will the panelists compare the impacts posed by coal, oil, gas, nuclear, biofuels, large hydro, wind, and solar? Such a comparison would find that the impacts on water from gas production are not zero but less than coal, oil, biofuels, large hydro, and arguably nuclear.

Will the panelists note that the electricity market share of coal has declined from 52% in 2000 to 39% from November 2011 to January 2012? Will the panelists accept that the market share of gas over the same time has increased from 16% to 27% and is displacing coal, while wind power in the USA has doubled since 2008 and solar power has increased 8-times since 2008? Will anyone note that pollution from mainly old coal-fired power plants caused 34,000 premature deaths last year, according to EPA data, while natural gas plants emit no soot and meet the EPA's Air Toxic Rule?

What does California raising its renewable standard for electricity production to 33% by 2020 indicate? Major progress to me. It shows the big strides that are possible by the most aggressive renewable energy state in the nation, and among the most aggressive jurisdictions in the world. Yet, where will California get its remaining 67% of electric power? Gas is the principal answer today and in 2020.

Will anyone note that natural gas consumers and electricity consumers have saved $1,000 in the last year? Will anyone speak to how important such savings are to the lives and safety of those with median incomes or certainly incomes below the 25th percentile of incomes?

Any hope that the EPA test results would create a ceasefire in the Dimock water wars seems fades, as the combatants rush to declare victory. Those seeking to shutdown the industry distort the results and falsely insist that they show that hydraulic fracturing caused frack fluids to contaminate water wells, while some industry supporters also falsely say the results prove that gas drilling had no impact of any sort on any water well in Dimock.

Neither position is true and battling combatants should destroy their credibility, when they insist on their false narratives. After years of testing, what can be said about the impact of hydraulic fracturing, as distinguished from the drilling, casing, and cementing of gas wells, on the water quality of water wells in Dimock?

Hydraulic fracturing did not contaminate anyone's water supply at Dimock. All tests show that, including the latest EPA results that the water does not have contaminants in it that are above health levels. Overwhelming evidence supports this conclusion, such as the low levels of chloride documented by EPA in the water.

But that is not all that must be said.

Unsafe levels of methane (which is not toxic and which, therefore, is not a health contaminant) in some water wells were documented since 2009, and comprehensive testing and other investigative actions done by the Pennsylvania Department of Environmental Protection documented that mistakes in the gas drilling phase caused gas to migrate to 18 water wells. The gas in 18 water wells was not natural or in them, before drilling took place in 2008. As a result of plugging of gas wells and repairs of others that the DEP ordered, methane levels in 13 of them fell to concentrations below the action standard by December 2010.

The partisans on both sides of the Dimock water wars are unsatisfied with the twin conclusions that no contamination of water due to hydraulic fracturing happened, but methane migration to some water wells did occur due to errors in casing or cementing in the drilling phase. Each wants total victory and battles the truth that denies it to both.

The truth in Dimock is that hydraulic fracturing did not cause frack fluids to contaminate water wells, but gas did migrate as a result of errors in drilling the gas wells. Hopefully that truth will not be a casualty of the Dimock water wars.

The record for the largest rooftop solar system in North America keeps falling. Two years ago, it was 3 megawatts at a warehouse serving GlaxoSmithKline in York County, Pennsylvania. Then it was a 5.38 megawatt system for Toys "R" Us in Flanders, New Jersey.

The 9 megawatt giant rooftop system covers 1.1 million square feet and will provide enough power for the equivalent of approximately 1400 homes. Records are made to be broken, but breaking the 9 megawatt mark for a rooftop solar system is not going to be easy.

Friday, April 6, 2012

Last night offered me another vivid example of how damaging to public understanding is the combination of huge media coverage of Prof. Howarth's 2011 study and the near lack of coverage for the 5 subsequent studies that debunk it. I was participating in a panel discussion about sustainability and energy choices at Montgomery County Community College, near Philadelphia, when a panelist who is a geologist and well meaning referenced the Howarth study, and took out the NYT gas reporter's significant story reporting on it.

Not too surprisingly, given that the Howarth study got a tsunami of press coverage and the subsequent studies debunking it received little or no ink, the panelist was unaware of the debunking studies such as those from Carnegie Mellon University, the Cathales' paper (the other Cornell University study), and the Worldwatch Institute.

This example also underlines the influence of the NYT and its gas reporter. From Boston to Washington DC, the NYT shapes opinion.

My co-panelist was genuinely surprised and gracious when I noted the existence of the multiple papers that conflicted with Howarth. He was glad to have the information. Had I not been there, one more audience would have been mislead about the state of the science.

But last night was another example of how Howarth, the NYT, and the lack of coverage of conflicting studies mislead good people.

The EU Parliament has a report and a motion from its Committee on Industry, Research, and Energy to move forward with shale gas development, in a manner that reduces venting and flaring and emphasizes strong regulatory oversight and use of best practices. http://www.naturalgaseurope.com/eu-shale-gas-report.

The Committee's report before the Parliament states that shale gas can reduce global warming pollution in some countries like Poland where 93% of electricity is generated with coal. It notes that gas can back up wind and other intermittent renewable sources of energy. The report also states that shale gas reserves can improve energy security in Europe, which imports significant gas from Russia, and where natural gas costs about $10 for a thousand cubic feet, or 4 to 5 times more than current US prices.

By moving forward with shale gas and finding that it can reduce global warming pollution in Europe, that already has a lower carbon footprint than the USA, the EU report apparently rejects the input of Prof. Howarth who traveled to Europe and participated in proceedings there. Professor Howarth argues for banning shale gas development, but his 2011 study has been refuted by a series of other studies from Carnegie Mellon University, Worldwatch Institute, National Energy Technology Laboratory, and other professors at Cornell University.

When a world class manufacturer like General Electric enters a business, quality goes up and prices come down. That's what has happened with wind power, since General Electric began making wind turbines.

As GE notes in its presentation to investors, the 5 cents per kilowatt-hour price is without any subsidies. That number makes wind power cheaper than new nuclear and new coal. It would be competitive with a new natural gas plant, if gas prices were at about $4 per thousand cubic feet and higher. The falling price of wind power is a key to the global wind boom that has seen about 240,000 megawatts of wind installed around the world, with nearly 50,000 megawatts in the USA.

Huge companies like General Electric and Siemens that is the leader in offshore wind can make big change happen quickly. The wind pricing revolution has been completed in less than a decade. Remarkable.

Thursday, April 5, 2012

Just as gasoline prices push to near record highs, PECO Energy's (serves all of Southeast Pennsylvania) electricity prices are falling back to where they were 16 years ago, proving again that theres is more good energy price news than bad. Declining electricity rates and natural gas bills remain one of the primary reasons why high gasoline prices are not stalling the economy.

PECO Energy's 12% to 19% price cuts, starting July 1, mean that electricity generation prices are back to 1996 levels, when Pennsylvania enacted a law ending state-sanctioned generation monopolies. In real or inflation adjusted dollars, electric generation prices are down about 40% for most customers, including a residential customer living on Social Security.

Many residential customers would be paying about $320 more per year had electricity rates in 2012 just matched increases in the Consumer Price Index since 1996. Cumulative savings since 1996 reach thousands of dollars.

Following the passage in 1996 of Pennsylvania's Electricity Competition and Customer Choice Act, the Pennsylvania Public Utility Commission broke the old monopoly electric rate into generation and distribution pieces--sometimes called unbundling the rate--and assessed the generation portion (including the uneconomic or "stranded" generation plant) of the residential rate to be 8.6 cents per kilowatt-hour. On July 1, the PECO Energy residential price will be 8.87 cents per kilowatt-hour, with some lower offers from competitive suppliers.

Indeed, 27% of PECO Energy's 1.6 million customers have shopped for electricity, and some are paying less than the PECO Energy default rate of 8.87 cents per kilowatt-hour.

Most commercial customers have fared even better than residential customers since 1996, and savings in inflation adjusted or real dollars for commercial customers can exceed 40%.

All this adds up to a big stimulus for Southeast Pennsylvania and the Commonwealth.

Will Americans buy more cars and use less gasoline? The March auto sales data says: "yes, indeed."

Indicating both that America's economy is healing and that it will be less oil-intensive, car sales hit 1.4 million in March, the highest monthly total since May 2008, and the sales of the Volt, Leaf, and Prius hit record levels, as demand for fuel efficient cars surged.

Proving that the reports of the Volts demise are premature, as were near-gloating reports about supposedly weak sales of the Prius, when it entered the market, Volt sales jumped to 2,289 in March; Leaf sales to 579; and Prius's sales to an amazing 28,711, up 54% from March a year ago.

The Prius is now one of America's and the world's most successful vehicles. And the Prius has blazed the hybrid trail, as Toyota alone sold more than 38,000 hybrid vehicles of all sorts in March.

Each month the new cars sold are becoming more fuel efficient than the new cars sold the month before. At this point, accoring to University of Michigan data reported in yesterday's Wall Street Journal on page B2, vehicles purchased in February of 2012 were 18% more fuel efficient than ones bought in October 2007.

Unlike during past periods of high gasoline prices, America's automakers have significant numbers of models that get more than 30 miles per gallon from which gas-sipping consumers can choose. As a result, General Motors, Chrysler, and Ford also saw significant volume gains.

This year car sales may hit 14.5 million vehicles, strongly up from the 10 million or so that were sold in 2009-2010, and heading back to the 16 million cars sold prior to the 2007-2008 economic meltdown. But America is now using less gasoline than during September 2001.

The combined trends of rising car sales and declining gasoline use are good news for America's economy, environment, and national security.

Wednesday, April 4, 2012

Abrahm Lustgarten, a reporter for Pro Publica who has written extensively about gas drilling, had reportedly interesting things to say about the quality of the public discussion about fracking at a panel on April 2nd at Allegheny College. Mary Spicer of the Meadville Tribune writes that Lustgarten noted that "...concern about the enviromental impacts of Marcellus drilling has escalated into hyperbole and almost-hysteria--and he's not sure why." Spicer then quotes Lustgarten as saying: "Any middle ground has been lost...It's dissolved into a false choice between frack and not frack, while attempts to educate the public has turned into panic."http://meadvilletribune.com/local/x1437247146/Panelists-square-off-at-Allegheny-shale-gas-forum.

Lustgarten describes well the condition of the public discussion. Yet, I am surprised that he is not sure why the middle ground has been lost, and so here are 6 possible reasons:

1. Gasland reached millions of viewers with a powerful, emotional message that gas production is an enormous threat, even evil. A purpose of the movie was to destroy middle ground and rally support for banning hydraulic fracturing. Whether one likes the movie or not, it had impact.

2. Sensational, false reporting appearing routinely in the NYT left many believing shale gas is a Ponzi scheme, gas is as dirty as coal, and that Pennsylvania's drinking waters were possibly poisoned with radionuclides. I don't blame readers of such journalism for reacting with panic or abandoning any middle ground.

3. Repetition of false narratives months or years after they have been debunked like Pennsylvania's drinking waters are contaminated with radionuclides or that gas drilling caused the massive fish kills at Dunkard Creek. See the recent Rolling Stone Magazine piece that repeated the radionuclide scare and the McKibben review in the New York Book review that falsely said gas drilling caused the Dunkard Creek fish kill. No surprise again that readers reading such material abandon any middle ground.

4. Typically a dramatic, scary and often false charge gets more coverage than any subsequent debunking. For example, see the paucity of the coverage about all the testing that proved Pennsylvania's drinking waters have no radionuclide contamination. See the huge coverage given the Howarth study but virtually no coverage given the Carnegie Mellon University study, the NETL, the Worldwatch Institute, and the other Cornell study refuting it. The NYT is the most egregious example of a journalism that promotes one-side of key issues, within the larger public discussion of gas drilling.

5. The fight over gas drilling has taken on its own momentum, with pro-drilling and anti-drilling groups daily facing off, and viewing any concession about information or facts to be weakness. The pattern becomes a harsh attack is met by a harsh response, and middle ground is lost.

6. There is no equivalent discussion and focus on our other energy choices--coal, oil, nuclear, renewables that include wind and solar, as well as corn ethanol and big hydro. Just look at Pro Publica's reporting on energy, as one example. The disproportionate focus on gas distorts. Gas is compared implicitly to a mythical perfect alternative that none of us use. All energy choices have impacts on the environment and have other pros and cons.

Wars have not been fought over Iowa corn but have over oil in the Middle East; yet water pollution from producing corn to make ethanol dwarfs the damage done to water quality by gas drilling. Using more gas has meant that coal electricity generation has declined from 52% of total electricity supply in 2000 to 39% in the last 3 months. The EPA states that pollution from mainly old coal-fired power plants causes each year 34,000 premature deaths. Using more gas that emits no soot for example has already saved thousands of lives and prevented hundreds of thousands of illnesses.

None of those comparative facts gain any prominence in the public mind. Yet, despite the obstacles to finding middle ground, most people want sensible ways forward that must include strong regulation and efforts to reduce the social and other costs of our energy choices. And progress is being made.

Andy Maykuth reports that the price declines "...are the latest evidence of how consumers are benefiting from record low prices for natural gas, which is used to generate electricity." Savings for residential customers in this most recent price reduction will be 12% and 19% for medium-sized commercial customers.

Twenty-seven percent of PECO's 1.6 million customers have shopped for electricity where they can buy wind or other renewable electricity, purchase longer term electricity contracts, or purchase possibly even lower-priced electricity than offered by PECO.

The decline in electricity prices and winter heating bills for gas customers since 2008, when shale gas supply boomed, now add up to approximately $1,000 per year for a family.

Tuesday, April 3, 2012

The first thing to note about EPA's investigations into local cases concerning impacts of gas drilling on water is that they are few in number. To my knowledge, just the fingers on one had is enough to count them.

The EPA has intervened in three cases involving drilling or hydraulic fracturing--Parker County, Texas, Pavillion, Wyoming, and Dimock, Pennsylvania--and is also conducting a general investigation mandated by Congress. In each case, EPA has responded to sustained and often organized expressions of public concern.

EPA must respond to legitimate public concerns, but the Parker County, Pavillion, and Dimock cases are teaching the EPA through hard experience that beginning its own investigation is a truly big decision. Inevitably, these cases are complex, controversial, and also involve state regulators. None of that means the EPA should never intervene, but it does counsel the EPA to be always cautious about intervening.

Putting aside EPA's general investigation into hydraulic fracturing that is in its early stages but seems to be going well, let's focus on the three local cases in which the EPA has intervened. How is it doing?

During the afternoon of Friday, March 30, EPA Region 6 issued a public statement that effectively dropped its case against Range Resources concerning alleged contamination of water wells in Parker County. Range Resources will no longer be required to deliver water to two homes and will cooperate with EPA to monitor water quality at a number of water wells in the area.

The Friday afternoon timing of the EPA Region 6 statement concerning Parker County suggests EPA is less than pleased that it got involved in the Parker county case. Indeed, the Parker County matter includes a judge finding that evidence had been doctored by some opposed to gas drilling for the purpose of encouraging EPA to enforce against Range Resources. The judge's finding on a fabricated video is shocking reading and reminds that some are willing to trample truth to win.

Bottom line is that EPA should never have pursued action in Parker County. Its intervention was a mistake. On this one, EPA gets an F.

In the case of Pavillion, Wyoming, EPA issued a draft report and sought public comment. As a result of comments received from Encana and others, EPA has agreed to take more water samples. Some characterize the EPA process and response as examples of regulatory failure. I don't agree.

No matter what the additional water testing of the aquifer shows concerning whether or not hydraulic fracturing itself contaminated water, the EPA Pavillion investigation has apparently confirmed at least two events that are troubling. First, there seems to be no argument that storage pits did leak and did cause some water contamination, as the EPA report states. Second, there seems to be no argument that hydraulic fracturing was conducted within, at most, a few hundred feet of the aquifer, a practice that simply is too risky, regardless of whether contamination did or did not result.

As to EPA's willingness to do more water testing and sampling in Pavilion, in response to thoughtful criticisms made by Encana and others, I give credit to EPA for doing so and for establishing an investigation process that began with a draft of its Report issued to the public and then included an opportunity for public comments that the EPA has obviously taken seriously. These investigations are complex and difficult. The goal for a regulatory agency must be to establish the truth and not not to win for winning's sake. EPA is behaving in keeping with that duty.

To date on Pavillion, I give the EPA a tentative B minus, as the case is not over.

Dimock has become a political football, where most discussion of it contains big errors, and so I have viewed the EPA testing as an opportunity to clarify matters. I have never seen any evidence that hydraulic fracturing itself caused pollutants to contaminate anybody's water at Dimock, but substantial evidence established that gas did migrate, at least during 2009 and 2010, to 18 water wells, as a result of gas drilling.

On Dimock, I give the EPA a tentative B.

Three cases and three grades--F, B minus, and B--averages to a C for the EPA. If it completes well the Pavillion and Dimock investigations, EPA's cumulative grade could rise to a B for the three investigations, and that would be good for everyone.

Monday, April 2, 2012

On Friday, March 30th, the price ratio of oil to gas hit nearly 53 to 1, after setting a new record of 48.6 to 1 on March 27th. Friday saw gas fall to $1.95 at the Henry Hub, and oil traded at $103.

In North America, the days of the price of oil being being closely linked to the price of gas, with oil trading at about 11 times the price of gas, have been ended by the shale gas boom.

Though natural gas is almost too cheap to meter, the Natural Gas Act (Pickens Plan) remains blocked in the House of Representatives and Senate, where 51 Senators support it, but 60 votes are needed to end a filibuster against the bill. As a result, today will be one more day when America fuels up with expensive and dirtier oil.

Down, down goes the price of natural gas, hitting $1.95 for a thousand cubic feet on Friday, March 30 at the Henry Hub, as demand is swamped by supply. Those rock bottom gas prices are reducing the number of drilling rigs and gas well starts in Pennsylvania. In the first two months of 2012, well starts declined from 342 to 269 or approximately 25%, according to the folks at www.marcellusgas.org.

While well starts fell, MarcellusGas.Org reports that permit approvals actually increased 6% in the first quarter of 2012, compared to the same period in 2011. But an excellent comment to this posting says permits too have fallen, raising questions about the comparative period permit data offered by MarcellusGas.Org.

Putting aside permit trends, total permits approved are listed at 9,758 and total number of wells drilled is listed as 5,508.

The number of violations is also down significantly--30% decline in the first quarter of 2012, compared to the same period in 2011. Total violations in 2010 were approximately 1200 and then 1100 in 2011. Were a 30% decline from 2011 totals be sustained for the full 2012 year, total violations would fall below 800.

What is the cause of the sharp decrease in violations in the first quarter of 2012? While improved company performance or changes in enforcement could be factors, probably the decrease in operating drilling rigs and the number of well starts is the prime explanation, but the trend bears watching. The 30% decline in violations tracks closely the 25% drop in well starts and 15% decline in drilling rigs operating in Pennsylvania. Less business activity should reduce the number of violations, all other factors being equal.

As many of us prepare to watch the NCAA final tonight and look at the ruins of our brackets, back on Selection Sunday, what were our odds of picking a perfect bracket?

Your chance of picking perfectly all 63 games was 1 in 35.4 billion, according to the Book Of Odds (www.bookofodds.com) and Erik Holm writing in the Monday, March 26 Wall Street Journal at Section C, page 3. Holm adds that a company that has being insuring contest prizes for picking a perfect NCAA bracket for more than a decade says 59 right picks is the most it has ever seen.

This year high seeded teams did better than last year, but it was not a good one for those who picked number 1 seeds to make the Final Four or Duke to win it all (probably just me). While a Kentucky versus Kansas final is hardly a shocking match up, probably it was yet another good year to be in the business of receiving insurance premiums for insuring the prize in contests for picking the perfect bracket.

About Me

I am an expert on energy, environment, green economy, competitive electric markets, and utility regulation with unique experience in and out of government. I am a Democratic candidate for Governor of PA. See www.hangerforgovernor.com. You can email me at john@hangerforgovernor.com. I have been both the Secretary of the Pennsylvania Department of Environmental Protection and Commissioner of the Pennsylvania Public Utility Commission. I have made leading regulatory decisions, testified to Congress and state legislatures, and been interviewed countless times, appearing on CBS evening News, NBC Evening New, CNN, BBC, CBC, and many more outlets. I am a 1984 graduate of the University of Pennsylvania and 1979 graduate of Duke University.